>Are DNS queries blocked?

No, not with LittleSnitch (neither in/out-bound).

When you see the LittleSnitch dialogue (asking to `Accept/Deny`), whatever hostname is there has already been pre-resolved by upstream DNS provider (does not matter which option you select). This software pares well with a PiHole (for easy layperson installs), but even then is insufficient for OP's attack.